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Longboat Key
Saturday, May. 2, 2009
5 years ago

Hope in the Unseen

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by:
Mark Gordon
Business Observer

Citizens Property Insurance Corp. is getting into the stimulus business.

The agency, a state Legislature creation that is obligated to cover all homeowners who have no other insurance options, recently tweaked its policy rules based on a state law that went into effect Jan. 1. The new provision states that policyholders must have hurricane shutters or approved impact-resistant windows and doors if their home has a replacement cost of $750,000 or more and it’s in a wind-borne debris region.

If a homeowner doesn’t meet this new code, Citizens has the right to cancel the policy. That’s a real quandary considering the 2002 law that set up Citizens in the first place is what made it Florida’s insurer of last resort.

More quandaries could be forthcoming. Several Gulf Coast insurance agents say the rule could spawn two more changes: One, Citizens could lower the home value threshold in the rule to $500,000 or even $250,000. That would impact a much higher number of homes.

And some insurance experts say that if it’s good enough for Citizens it might be good enough for the private insurers in the state. If other insurers adopted the rule, or something similar, even more homes in the state would be on the hook.

The rule changes, no matter how far they go, might also provide a stimulating advantage for several Gulf Coast-based window and hurricane shutter companies, many of which have been collapsing under the weight of the recession. Indeed, Fort Myers-based Rolsafe International, a one time $23 million hurricane protection and window company, recently shuttered itself — just a few months after its president said he hoped to capitalize on the new insurance rules in 2009.

A few companies in the Sarasota-Bradenton market are fairing somewhat better than Rolsafe. Bill Spindel, who runs Sarasota-based Windshutters, said his company has been “getting quite a bit of calls” from homeowners requesting new shutters based on the Citizens rule change.

Executives at Venice-based PGT Industries, a publicly traded company that has cut back production and let go of employees as a result of the downturn, are also hopeful the change will lead to more business.

Rod Hershberger, PGT president and chief executive, has spoken to Citizens officials about the changes, including having a conversation with the insurance agency’s chairman, Jim Malone.

“We feel for us it will be a benefit,” says Hershberger. “But we’re not sure how soon we will feel it or how much it will help us.”

Then there’s Bradenton-based Universal Window Solutions, which is actually opening a new showroom in response to the demand, both real and anticipated. “We’ve heard these calls exceedingly,” says Universal chief executive Bob Smith, “to the point where we are racing to keep up with it.”

The company’s first step was to open a 2,000-square-foot showroom on Longboat Key, which it did in the middle of March. If that sales effort is successful, Smith says he’s considering opening more showrooms in Siesta Key, Fort Myers and Naples.

Annual revenues are down almost 50% at Universal, from as high as $15 million in 2006 to $8 million in 2008. The employee numbers have been slashed too, from 65 in 2006 to 25 now. Smith is projecting about $8 million again in revenues in 2009, with about half of that coming directly from work due to the new
Citizens’ policy.

Says Smith: “We are hoping to create our own bottom by capitalizing on some of these opportunities.”